TD Cowen analyst Moshe Orenbuch upgraded the rating on Enova International (ENVA – Research Report) to a Buy today, setting a price target of $117.00.
Moshe Orenbuch has given his Buy rating due to a combination of factors that highlight Enova International’s strong performance and strategic positioning. The company has consistently achieved rapid growth in receivables and revenue, surpassing its expense growth, which is a testament to its operational efficiency. Despite recent macroeconomic volatility, Enova continues to experience robust growth in both consumer and small business lending, benefiting from a favorable competitive environment.
Enova’s diversification across consumer and small business lending, as well as within small business lending verticals, provides it with the flexibility to adapt to changing market conditions. The short duration of its loans allows for quick adjustments in capital allocation to optimize returns. Additionally, the company has demonstrated operating leverage with improving EBITDA margins, as revenue growth outpaces operating expense growth. The management team’s focus on shareholder value, particularly through an aggressive buyback program, further supports the Buy rating. The current valuation, trading above historical absolute P/E but below historical relative P/E, presents a favorable opportunity given Enova’s track record of strong growth.